New Delhi, May 20 -- Automakers have told the government that consumers are unlikely to adopt flex-fuel vehicles unless high-ethanol fuels such as E85 and E100 are priced significantly below petrol, according to two people aware of discussions between the petroleum ministry, oil marketing companies, and auto lobby group Society of Indian Automobile Manufacturers (SIAM). In Brazil, where most vehicles can run on E85 or E100 fuels, high-ethanol blends are priced lower than the standard E27, according to the country's national agency of petroleum, natural gas, and biofuels. E85 and E100 fuels require dedicated flex-fuel-compatible engines, unlike E20 petrol currently used in regular vehicles in India. "The incentives sought include a reduction in the GST (goods and services tax) rate on flex-fuel vehicles as well as some benefit for consumers on opting to use high-ethanol blends," one of the people cited above said on condition of anonymity. Currently, flex-fuel vehicles-even though there are none available commercially in India as of today-are taxed at the same rates as petrol- and diesel-driven vehicles, ranging from 18% for smaller cars to as high as 40% for larger models. However, according to the second person, the proposal for GST rationalization has so far been limited to two-wheelers, since lowering taxes on cars would place flex-fuel vehicles closer to electric vehicles, which attract 5% GST. Hero MotoCorp is actively developing flex-fuel vehicles, a spokesperson said, adding some form of demand-side support and incentives would be important during the initial scale-up phase to drive consumer adoption in the price-sensitive two-wheeler segment. "Policy measures that help offset the higher upfront technology costs for original equipment manufacturers and improve consumer affordability like lower pricing for E85 can accelerate the adoption of alternative fuel vehicles in the country," the spokesperson said. According to the second person, lowering prices of E85 and E100 fuels is critical to attract customers, who would otherwise opt for lower ethanol blends such as E20 because of their higher energy content. Since ethanol contains less energy per litre than petrol, vehicles running on higher ethanol blends typically deliver lower fuel economy....